Antitrust Policy: The Impact of Revenue Penalties on Price
The paper examines the impact on a firm’s price when it faces the possibility of an antitrust investigation and associated potential revenue penalty. As well as presenting a general model of antitrust intervention, an illustrative example reflecting the provisions of the 1998 UK Competition Act is offered, the example being developed to explore the implications of the probability of antitrust intervention and punishment increasing non-linearly as a firm’s profit rises. Copyright Springer Science+Business Media, LLC 2007
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